I’ve watched the Construction Products Association slash its growth forecast for UK construction from 1.9% to 1.1% in 2025. For 2026, projections dropped from 3.7% to 2.8%. That’s half the anticipated growth, erased by a single cause: policy uncertainty.
What caught my attention wasn’t the numbers. It was the contradiction. Eighty-one percent of firms report positive or neutral outlooks for 2026. Yet 35% have paused or reviewed projects. The industry believes in the work ahead but won’t commit to it.
Why Optimism Produces Paralysis
I’ve asked developers what’s stopping them. The answer is always the same three words: taxation policy, end-user demand, regulatory clarity. These aren’t technical problems. They’re decisions the government hasn’t made yet.
The effect is measurable. Fifty-nine percent describe current conditions as “static” and 21% as “contracting.” Private housing growth projections dropped from 4% to 2% for 2025. Infrastructure and commercial office projects stalled through spring and summer.
Firms froze not because the work disappeared, but because they couldn’t price the risk. Who bears the tax increases? What compliance costs come next? Without answers, 92% expect tender prices to rise over the next year—driven by material volatility and Building Safety Act compliance costs they can’t yet quantify.
The Crisis Underneath the Paralysis
The CITB estimates the industry needs an additional 251,500 workers by 2028. The workforce has already declined 10.8% since the pandemic. Thirty-five percent of current workers are over 50. Only 20% are under 30.
Fifty-three percent of firms report skills gaps that 90% can’t fill. The shortages hit hardest in specialist trades, building services, site management, project management, and sustainability roles.
Construction apprenticeships have a 47% dropout rate. The pipeline that should solve this problem is collapsing faster than the workforce itself.
The Misalignment That Explains Everything
I’ve come to see this as a fundamental timing problem. Construction operates on long planning cycles. Government policy operates on budget cycles. Projects that take years to plan can’t adapt to annual fiscal adjustments.
The sector has been clear about what it needs: pro-growth tax policies, committed infrastructure investment, targeted housing support, regulatory clarity, and VAT removal on listed building repairs. Sixty-nine percent believe the government’s £600m training pledge is insufficient and want sustained, multi-year funding targeting both trades and management roles.
But asking for multi-year commitments from a system built on annual budgets is like asking a sprinter to run a marathon. The structures don’t match the requirements.
This is why firms freeze mid-project while reporting optimism. They believe in the long-term demand. They don’t believe in long-term policy stability. And without that stability, the workforce crisis compounds, costs rise, and half the expected growth disappears—not because the work isn’t there, but because the ground keeps shifting beneath it.